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WB forecasts steady growth prospect for Bangladesh

Bangladesh’s economy will expand steadily in the next three years, with the growth of the gross domestic product (GDP) rising to 7.0 percent in 2017, according to the latest report of the World Bank (WB), reports BSS.
The report, Global Economic Prospects 2015, released in Washington DC on Tuesday (early Wednesday in Bangladesh), projects that GDP growth in Bangladesh will be 6.2 percent this year, and it will maintain steady a pace to escalate at 6.5 percent in 2016 and 7.0 percent in 2017.
The WB projects continual growth for the country when the global economy would also improve, but amidst the downside risks from divergent trends.
The Bank said the economic growth would be supported this year and afterwards by continued robust remittances and recovery in private consumption demand, but political stability would be vital to its sustainability.
On the major economic fronts, the Bank’s outlook was mixed as it noted slow export growth as demand in key export markets softened. In addition, textile manufacturing production was affected by disruptions due to social unrest and by stricter enforcement of regulations on working conditions following the collapse of Rana Plaza.
In the report, the Bank said that exports would improve after transition to better enforcement of factory safety standards and working conditions though wage pressures in the absence of productivity gains could erode its competitiveness.
On the other hand, the Bank observed that trade facilitation reforms in the region could significantly boost integration into global trade.
The Bank admitted that the activity in Bangladesh began to normalise in 2014 as social unrest abated from a spike in the run-up to national elections in January 2014.
“With government spending offsetting softness in private demand, the economy is estimated to have grown by 6.1 percent in financial year 2013-14, ostensibly because increased agriculture and service sector growth outweighed the decrease in industrial growth,” the WB report said.
Besides Bangladesh, developing countries would see an uptick in growth this year, boosted in part by soft oil prices, a stronger US economy, continued low global interest rates, and receding domestic headwinds in several large emerging markets, says the Bank’s report.

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